RICO Law Blog : RICO Lawyer & Attorney : Thomas Walker : Cosho Humphrey Law Firm : RICO Act, Federal and State Racketeering Litigation, Boise Idaho

Lawyers for British American Tobacco Co., seeking a chance to overturn an anti-racketeering ruling against it, on Friday notified the Supreme Court of a new lower court ruling that bars the overseas reach of the Racketeer Influenced and Corrupt Organizations Act of 1970 — one of the main U.S. laws used to challenge business misconduct.  BATCo’s lawyers provided the Court’s clerk the decision reached on August 25,2010 by U.S. District Judge Jed S. Rakoff in New York City in the case of Cedeno, et al., v. Intech Group, et al. (District docket 09-9716).

The filing was made  to further support BATCo’s petition for rehearing in British American Tobacco Ltd. v. U.S. (Supreme Court docket 09-980). ”The Justices have not yet acted on the petition.

 Judge Rakoff’s ruling, is based on the Supreme Court’s June 24, 2010 decision in Morrison v. National Australia Bank (08-1191).  In the Cedeno case, Judge Rakoff concluded that the reasoning of Morrison — barring the overseas reach of a U.S. securities fraud law — applies fully to RICO.  A Second Circuit Court precedent that ruled the other way, the judge ruled, “is no longer good precedent in light of Morrison.

Judge Rakoff is a RICO expert and the author of  the Law Journal Press’s publication, “RICO: Civil and Criminal Law and Strategy.”

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Last spring I reported on a case filed in Russia by the Russian Federation against the Bank of New York Mellon (BONY) in which Russia sought to apply the United States’ RICO statute in the Russian court. The Wall Street Journal Law Blog reported this morning that the Russian Federal Customs Service failed to send a representative to appear in a Moscow court for the resumption of pretrial hearings.

As background: The Russian Federal Customs Service is suing BONY over an illegal wire transfer scheme from the 1990s, when two Russian émigrés — one of whom worked for BONY — moved $7.5 billion to American accounts from Russia via unlicensed wire transfers. They later pleaded guilty to various offenses under U.S. law. BONY, under a non-prosecution agreement with the DOJ, acknowledged failure to properly monitor wire transfer activity and paid a fine of $14 million. Now the Russians claim they, too, should be awarded a fine, to the tune of $22.5 billion, and are basing their argument on the RICO statute.

Russian Judge Lyodmila Pulova said the customs service had faxed her a petition requesting a delay until Oct. 15, and explaining only that the service’s lawyers were busy with other matters. Judge Pulova was unimpressed. She overruled the request and agreed to hear testimony from two of the bank’s U.S. experts ‒ including former attorney general Richard Thornburgh. When the witnesses finished, Pulova put off continuation of the hearing until Nov. 13.

BONY is using Gregory Joseph as a RICO expert. Mr. Joseph reportedly presented an 80-slide PowerPoint presentation to the court, explaining why he believes that the case would require the court to interpret U.S. criminal laws.

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